MPUSD offers generous retirement incentive to teachers

MONTEREY >> Monterey Peninsula Unified School District officials have approved a generous retirement incentive that could save millions for the district if enough teachers sign up for it.

Administrators call it the Supplemental Employee Retirement Plan, and it’s offering 75 percent of a teacher’s existing salary distributed over at least five years. Teachers have to be at least 55 years old and have been with the district for at least five years to qualify for the incentive.

“We think it’s a real win-win for the district and our employees,” Superintendent PK Diffenbaugh said. “For our teachers who’ve been here for a long time and have been committed to the district, they get a very generous incentive to retire earlier than they’ve planned to. The district gets to save money, something that’s beneficial to our long term fiscal health.”

MPUSD administrators are seeking ways to cut costs as pension costs escalate and threaten to wreak havoc with the district finances. So far this year, administrators have identified $2.5 million in cuts, mainly by reducing the number of teachers employed in the district.

But administrators are not expecting to have to layoff anyone. Rather, they’re banking on attrition, and a generous retirement incentive could go a long way to convince people this is a good time to leave.

Representatives with Keenan Associates, the consultant that’s helping put the package together, estimate that 127 teachers at MPUSD meet the requirements. For the program to generate enough savings, 45 teachers have to sign up for it. That would translate into $2.7 million in savings over five years, according to Keenan Associates.

“If a teacher makes $90,000 a year, what top-end teachers make, and we replace that teacher with a teacher who makes $45,000 a year, which is entry level, the district saves $45,000 but we save it on an ongoing basis. Even though we pay this annuity, the difference is greater and saves the district money,” Diffenbaugh said.

Teachers have until Jan. 26 to decide whether early retirement is for them. If not enough teachers enroll, the program won’t take effect.

The average age of those eligible to participate is 60, and they have served an average of 20 years in the district.

Although the district would be losing experienced teachers, the district’s ramped up recruitment efforts have paid off, Diffenbaugh said.

“Over the last three years we’ve really expanded our recruitment out-of-state... and believe that educators are drawn to the innovative programs we’re putting in place and the type of culture we’re creating.”